When asked why he robbed banks, legend has it that Willie Sutton said, “because that’s where the money is.”
I’m reminded of this quote today when reading the reports that Apple is in talks with the cable operators about their television plans.
Why are they talking to them? Because that’s where the content is.
This should surprise absolutely no one. In fact, the news isn’t even actually new. Apple has been talking to these guys for years. And they’ll keep talking to them right up until they debut whatever it is they’re going to debut.
It seems that the shock of this news is more around the fact that Apple may not actually completely transform the industry overnight. No shit. You know what other industry they didn’t transform overnight? The mobile industry.
We all enjoy looking back fondly to the iPhone debut in 2007 as the moment when everything changed. In hindsight, it did. But it wasn’t immediately apparently to many people — which is exactly why you had the infamous Steve Ballmer laugh. What Apple did back then was release the most beautiful smartphone ever created. But it was only the most beautiful smartphone ever created and not the most beautiful paperweight ever created for one reason: AT&T.
Yes, this is me giving AT&T credit for something beyond creating the worst cellular network known to man for a few years there. But it’s true. The iPhone was a complete non-starter without a carrier partner. Apple did not own and/or operate a cellular network. So unless the iPhone was to be WiFi-only, they needed to cut a deal.
Which is exactly what they need to do here as well.
Believe me, it pains me to say this. I’ve been a happy cord cutter for well over a year now. It’s mainly because I’m of the belief that if the carriers are Hades, the cable companies are Cerberus. They’re all greedy giants that thrive thanks only to a complete and utter lack of competition. And the cable industry is actually much worse than the mobile industry in the U.S. because they have regional monopolies. I got sick of paying upwards of $150 a month when I really only wanted three or four channels, so I stopped. But they still have me by the balls when it comes to my internet. So when I read about a de-facto merger between Verizon and Comcast, I really want to scream. But I digress…
As much as I hate it, I know that if Apple is actually going to succeed in this space, they need these jokers. Just like Microsoft need them for what they’re doing with the Xbox 360. Both were trying to deliver content solely on-demand without any live aspect and no guided programming — it just hasn’t worked to the same extent that cable television has for decades now. I absolutely believe that one day this will change, but we’re not there yet.
And I think it will take a company like Apple or Microsoft or Google to cut a deal with the cable companies and then run an end-around. Of course, I also thought Apple and Google were going to do this to the carriers, and then Google got into bed with them instead. But I digress again…
Of course Apple is going to cut a deal with one of the cable giants to get their television aspirations off the ground. In fact, they’ll probably have to do a few deals because of the aforementioned regional monopolies. Steve Jobs seemed to realize this would be a huge pain, which is probably why he avoided doing it and went with the initial, hamstrung Apple TV instead. It’s easier to negotiate with one power player and then use a deal as leverage against the others. See: the AT&T strategy — which has worked brilliantly for Apple. It’s much harder to negotiate when you have to deal with three or four different power players at the same time. Especially when they all know it.
Maybe Apple can cut an unconventional deal and get one of the satellite TV guys on board — they’re even finally going after internet as well. But I have a feeling there are going to be some big cable deals in Apple’s near future.
And once they have them, just as it was in 2007, Apple will undoubtedly unveil some sort of beautiful hardware. Maybe it will be an actual television, or maybe at first it will just be a new set-top box. It doesn’t matter. People will lust after it because people tend to lust after diamonds rather than pieces of shit — which is exactly what the vast majority of cable boxes currently are. And they’ll iterate and iterate and push apps and other services. They’ll slowly steal the customers from the cable companies. The cable companies will realize this and threaten to back away. Maybe some of them turn to the open arms of Google TV and/or their Motorola division. A couple others go with Microsoft. We’ve seen this story before.
But by then, Apple will have the actual content producers enamored because at the end of the day, they exist to entertain the customer. And again, Apple will have the customers. At this point, Apple will cut their own deals. Though maybe not with NBC, because Comcast owns them. That’s how fucked up this industry is. (Besides, Apple has always had trouble with NBC.)
Anyway, I’m cautiously optimistic about Apple’s television plans. I think it’s going to be a whole hell of a lot harder to pull off than Apple’s mobile blitzkrieg was. But with time, innovation always wins out. Sometimes you just have to make a deal with the devil first.